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Health Care Spending and Medical Inflation

By June 16, 2023Commentary

Every American should read at least the summary of this report on national health spending.  In line with my recent posts about what an unsolvable crisis our financial situation is, this report gives the latest projections on health spending for the next eight years.  It is written by the experts at the Office of the Actuary.  I mentioned the growth in Medicare spending in a post earlier this week.  For the nation as a whole spending will rise to over $7.1 trillion from $4.7 trillion estimated in 2023, or over $20,000 for every person in the country.  Spending increases at an annual average of 5.4%, almost a full percentage point higher than estimated nominal GDP growth.   Consumers pay a lot of the cost through private health insurance premium contributions and cost-sharing on private insurance and Medicare.  Medicaid is a gold-plated coverage program that makes enrollees basically pay nothing.  So the rest of us pay for it with taxes.

Medicare spending is estimated at $1.85 trillion in 2031, and Medicaid spending will be $1.2 trillion, while private health insurance picks up about $2.1 trillion.  Medicare spending per person is by far the highest with the highest rate of growth, followed by Medicaid and private health insurance the lowest with the lowest growth rate.  Hospital inpatient and outpatient care eat up by far the biggest chunk of spending and have the fastest growth rate.  There is lots of additional detail, giving you a good picture of where health spending has gone and is going.  (HA Article)

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